Racing Australia Annual Report 2015
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financial year are discussed below.
Provision for impairment of receivables
The provision for impairment of receivables assessment
requires a degree of estimation and judgement. The
level of provision is assessed by taking into account
the recent sales experience, the aging of receivables,
historical collection rates and specific knowledge of the
individual debtor’s financial position.
Estimation of useful lives of assets
The consolidated entity determines the estimated
useful lives and related depreciation and amortisation
charges for its property, plant and equipment and finite
life intangible assets. The useful lives could change
significantly as a result of technical innovations or
some other event. The depreciation and amortisation
charge will increase where the useful lives are less than
previously estimated lives, or technically obsolete or
non-strategic assets that have been abandoned or sold
will be written off or written down.
Provision for impairment of inventories
The provision for impairment of inventories assessment
requires a degree of estimation and judgement. The
level of provision is assessed by taking into account the
recent sales experience, the aging of inventories and
other factors that affect inventory obsolescence.
Goodwill and other indefinite life intangible assets
The consolidated entity tests annually, or more
frequently if events or changes in circumstances
indicate impairment, whether goodwill and other
indefinite life intangible assets have suffered any
impairment in accordance with the accounting policy
stated in note 1. The recoverable amounts of cash-
generating units have been determined based on value
in use calculations. These calculations require the use
of assumptions, including estimated discount rates
based on the current cost of capital and growth rates of
the estimated future cash flows.
Employee benefits provision
As discussed in note 1, the liability for employee benefits
expected to be settled more than 12 months from the
reporting date are recognised and measured at the
present value of the estimated future cash flows to be
made in respect of all employees at reporting date. In
determining the present value of the liability, estimates
of attrition rates and pay increases through promotion
and inflation have been taken into account.
There are no other key sources of estimation
uncertainty at the reporting date that the Directors
consider have a significant risk of causing a material
adjustment to the carrying amounts of assets and
liabilities within the next financial year.
(b) Income tax
Racing Australia Pty Ltd
Racing Australia Pty Ltd has received a private ruling
dated 11 February 2015 from the Australian Taxation
Office confirming its exemption from Income Tax under
section 50-45 of the Income Tax Assessment Act. This
ruling is applicable for the financial years ended 30
June 2015 through 30 June 2020.
Thoroughbred Trainers Service Centre Limited
Current tax
Current tax is calculated by reference to the amount of
income taxes payable or recoverable in respect of the
taxable surplus or deficit for the year. It is calculated
using tax rates and tax laws that have been enacted or
substantively enacted by the reporting date. Current tax
for current and prior periods is recognised as a liability
(or asset) to the extent that it is unpaid (or refundable).
Deferred tax
Deferred tax is accounted for using the comprehensive
balance sheet liability method in respect of temporary
differences arising from differences between the
carrying amount of assets and liabilities in the financial
statements and the corresponding tax base for those
items.
In principle, deferred tax liabilities are recognised for
all taxable temporary differences. Deferred tax assets
are recognised to the extent that it is probable that
sufficient taxable amounts will be available against
deductible temporary differences or unused tax losses
and tax offsets can be utilised. However, deferred tax
assets and liabilities are not recognised if the temporary
differences giving rise to them arise from the initial
recognition of assets and liabilities (other than as a
result of a business combination) which affects neither
taxable income nor accounting surplus. Furthermore,
a deferred tax liability is not recognised in relation to
taxable temporary differences arising from goodwill.
Deferred tax assets and liabilities are measured at the
tax rates that are expected to apply to the period(s)
when the assets and liability giving rise to them are
realised or settled, based on tax rates (and tax laws)
Racing Australia Pty Ltd
| ACN 105 994 330 and Controlled Entities | Annual Report for the Financial Year Ended 30 June 2015
